RBI doubles bond underwriting fee

ET BureauMar 13, 2009, 12.53am IST

In a move to push through government borrowings without pushing up yields, the Reserve Bank of India has fixed an underwriting commission that is nearly double of what it typically offers to primary dealers for underwriting government bond auctions.

For the Friday's auction of government bonds worth Rs 12,000-crore, RBI has fixed 0.82% as underwriting commission on the 8-year paper while on the long dated paper, the commission is 1.3%. RBI also had a meeting with bank treasurers to take stock of the markets position on bonds after yield on the 10-year paper crossed 7%.